In “Trump, Trade, and the Open Skies” (September 7, 2017), Ashley Nunes discusses whether the United Arab Emirates (UAE) and Qatar are playing by the rules of the United States’ Open Skies agreements, the primary trade deals that govern flights between countries. (The United States currently has 123 such bilateral agreements.) Nunes does not dispute that both Gulf countries have provided their state-owned airlines—Emirates Airline, Etihad Airways, and Qatar Airways—with billions of dollars in subsidies but rather argues that the “vague” language of Open Skies means “subsidies aren’t prohibited outright.”
This narrow understanding of the Open Skies agreements, however, betrays its stated intentions. By signing the deals, both the UAE and Qatar agreed to ensure a “fair and equal opportunity” to compete. Furthermore, both the U.S. Department of Transportation and the U.S. Department of State have the statutory authority to “eliminate discrimination and unfair competitive practices faced by United States airlines in foreign air transportation.” This guidance is affirmed in the 1995 Statement of U.S. International Air Transport Policy, which declares that one of the United States’ objectives in international aviation policy is to “ensure that competition is fair and the playing field is level by eliminating marketplace distortions, such as government subsidies.” Nunes’ limited interpretation of the Open Skies agreements ignores context, intent, and ultimately the best interests of U.S. airlines and the hundreds of thousands of people they employ.
The fact is that Gulf carriers have received over $50 billion since 2004, or roughly $3.8 billion per year. This has enabled them to expand their flights to the United States by 50 percent since January 2015. The additional supply, however, has not led to profits; according to a study by GRA, Inc., a consulting firm that conducts analyses for the aviation industry, 19 of the 23 Gulf carrier routes to the United States lost money in 2014. Over half of the routes had estimated loss margins of over 20 percent. These routes are unprofitable because of a lack of passenger demand and an attempt by
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